Next-Gen Direct Mail: Faster, Smarter, and More Integrated

Several months ago, a press operator at a commercial printing company that had recently installed high-speed, high-volume production inkjet equipment told me that inkjet was less about the equipment and more about the software. Indeed, the so-called killer app for production inkjet isn’t necessarily the printing technology per se, although that’s part of it, but what sophisticated front-ends—and sophisticated operators—are capable of vis--vis automation and personalization. For direct mail printers, it allows them to “mail smarter,” as generally gone are the days when customers were willing to drop millions of direct mail pieces. Today, it’s more about some level of customization which, in addition to the much-vaunted advantages of boosting direct mail response rates, also has the back-end benefit of facilitating recipient tracking and other analytics.

At the same time, print direct mail is increasingly part of a larger overall campaign—nothing new there—but now printers are starting to take advantage of opportunities in overall campaign management, where software controls, automates, and links the electronic and print components. Production inkjet is proving to be the ideal hardware platform for this.

“Everything evolved a lot,” said Julie Loyer, Communication and Sustainable Development, Cascades Fine Papers Group. “With the versioning and the personalization, inkjet provides possibilities that we didn’t have before.”

 

The Story So Far

In the past two or three years, following the usual technological growing pains, production inkjet has started to gain momentum, with new systems and new installations pushing the limits of what the technology can accomplish. Inkjet adoption has come—to some extent—at the expense of offset work, but more so at the expense of toner-based digital printing. Monochome, then color, systems emerged and proliferated, with systems like Canon Solutions America’s JetStream and ColorStream series, Fujifilm’s J Press, HP’s T200/T300/T350/T400, Kodak’s Prosper, Ricoh’s InfoPrint 5000, Screen’s Truepress, Xerox’s CiPress, and others coming to prominence and dominance. The first wave generally comprised web-fed devices, but cut-sheet systems, such as the Fujifilm J Press 720 and Canon Solutions America’s new “Niagara,” are emerging and look to take a significant part of market share, especially as the quality, in many cases, can be said to rival offset.

The new inkjet systems—highly touted for transactional and book printing, to name two top applications—are also changing the face of direct mail. Or, to be more precise, are proving to be a key player in a face that is already changing of its own accord.

 

Changing Channels

It’s tempting to think that print direct mail is a stagnant, if not moribund, segment of the printing industry. After all, marketers are using e-mail, social media, banner ads, SMS texting, and so on instead of print, right? Yes and no.

“A DMA [Direct Marketing Association] forecast said that digital or electronic—social, banner ads—now surpassed direct mail in terms of volume of purchases,” said Paul Foszcz, product marketing manager, J Press Series, Fujifilm. “However, the benefit of direct mail is its high response rate.”

Think about it this way. E-mail has a very high return on investment (ROI), yes, but only because its “production” cost is so much less than print. This is why spam is such a problem. If the response rate for an e-mail blast is, on average, 0.12 percent, that’s good, but only if you’re mailing to tens of millions of prospects. Although many consumer products companies like Procter & Gamble do, for a smaller business-to-business marketer with only a few tens or hundreds of thousands of prospects, that 0.12 percent isn’t a huge help in the ROI department, regardless of how free it may be.

There is also evidence that suggests that e-mail is becoming less effective—on so many levels—than it used to be. “Surveys have found that 75 percent of consumers say that they get more e-mail than they could possibly read,” said Foszcz. “And spam filters have evolved. So we and other companies have experienced that, if you get open rates of 30 percent these days, you’re lucky. Fully half of them are not even getting looked at.” So direct mail, with a response rate as high as 4.4 percent, at least gets to its destination and is looked at, even if only briefly. So rumors of direct mail’s death have been, as the saying goes, greatly exaggerated.

 

Adding Channels

Not that new media are going away any time soon, and studies over the years have found that the combination of print and electronic channels is more effective than any one of them in isolation. Hence, a growing emphasis on what some call—not without disparagement—“marketing services.” A related, but perhaps more acceptable, term is “campaign management.”

Precision Dialogue Direct (PDD) (www.precisiondialogue.com) is a direct mail printer based in Chicago. They’ve been in business for 55 years and do a high volume of offset and digital work for clients in such verticals as finance and banking, telecommunications, and pharmaceuticals. They’ve grown to 300 employees and, six years ago, acquired a company in Cleveland, “solely for the purpose of developing our interactive capabilities,” said Phil Manade, director of data services/digital development for PDD. “It’s a phenomenal brain trust of data analytics and web analytics. We knew that was the wave of the future, that big data would control the projects.”

PDD was an early adopter of production inkjet, largely monochrome, and has always had the technological savvy to customize its own systems rather than necessarily buy “off the rack.” They’re currently in the process of evaluating color inkjet systems. “We’re deep in the middle of that acquisition and research right now,” said Manade. “Wide-web, four-color inkjet is really coming of age right now. Two years ago, we didn’t see the equipment was there yet.” Sometimes there are advantages to not being an early adopter. He added, “A lot of our competitors added [color inkjet] equipment, and we’ve seen them actually try to turn over their current models to the newer models. This equipment is not cheap and it’s not something we can turn over in a year or two.”

It is somewhat ironic, perhaps, but PDD’s foray into overall campaign management has allowed it to mail less. Using such platforms as Exact Target and Adobe Campaign, the firm has developed a multichannel effort that integrates e-mail, SMS messaging (aka “texting”), and print, based on conditions or rules that are set up and automated. “I may say I want to hit them three times in 10 days with an e-mail and if they don’t reply, I send out a postcard.” said Manade. “And it’s an automated process.” And if they do click on a link in an e-mail, that captures a variety of information. If they respond via a Web address, QR, PURL, or other type of code printed on a mail piece, that also captures important information.

It’s all about the data. And now print direct mail can have all the tracking and analytics advantages of e-mail and other electronic media.

“Direct mail up to now has been ‘Hey, we’re here, call us if you need us,’” said Foszcz. “But with variable-data printing, now we can build in a PURL, we can build in a code, for each of the recipients of a direct mail piece. Bottom line is, you can now track direct mail. Precisely. By ZIP code, by city, by gender, by NAICS code... However you want to do it. Suddenly direct mail has exactly the same capabilities as e-mail.”

 

Getting Closer to the Client

All this is well and good, but how savvy are print clients? “There are two camps that go hand-in-hand with the growth of inkjet,” said Manade. “You have some who are very savvy and they know what [inkjet systems] are capable of and know what they want.” The other camp, however, is vaguely aware of the technology but needs a lot of education, hand-holding, and data cleaning.

“Some say, ‘That variable-data stuff is all hogwash because end users still don’t have what they need,’” said Foszcz. “The technology is far ahead of the end users right now. Either the data is not that good, or they don’t quite know how they would effectively vary images, style, and content to maximize their response rates from direct mail.” Indeed, one of the biggest barriers to effective variable-data deployment has been out-of-date, incomplete, or just plain bad data.

As with any new—or even old—technology, customer education has been one of the most important elements. “We set up a program where we have some of our business development managers and our technical people go to people’s sites and do seminars on campaign management,” said Manade. “The seminars have been phenomenally successful. We expose [clients] to digital variable, and it really sets off light bulbs on how to use these inkjets to their limits. When you talk about inkjet and you relate it back to what’s on their desktop then show them the industrial version, it’s absolutely eye-opening.”

 

Traditional Challenges

It bears mentioning that some traditional challenges remain, and one perennial concern of inkjet has been color quality and consistency.

“Printers have concerns about print quality and color gamut,” said Cascades’ Loyer. “The end user is looking for good quality reproduction of its logo. That’s a big challenge for the printers. It’s not true as much in the transactional segment, but it’s much more important in direct mail.”

This is especially true when you are trying to combine materials printed on different types of presses such as, said PDD’s Manade, “marrying an offset-printed piece with a digital-printed piece, and one is glued to the other. So you can imagine the color control required for that.”

However, technology improves, and inkjet has been improving with regard to substrate performance and color quality and consistency, and the limitations on the types of substrates you can run, are starting to fall away. “All those restrictions like substrates are disappearing,” said Manade. “That opens the window for us for our clients. We don’t always dictate the paper. A lot of the inkjets now can attack paper coatings.”

Paper companies like Cascades, International Paper, Finch, and others have been working with printers and equipment manufacturers alike to boost performance, as well as expand the range of grades available for inkjet equipment.

 

The Road Ahead

The direct mail conversation, whether it be in the context of inkjet or some other printing technology, is not simply about a static printed sheet any longer, and it hasn’t been for a long time. Some could argue that the campaign management strategy that PDD is doing so effectively is not an easy transition for small or even mid-size printers, and that’s a fair point. After all, PDD itself had to obtain the capabilities though the acquisition of a business that focused on interactive media and analytics. But it can be done, and the benefits are tangible.

“We don’t see people coming up to us and saying ‘we want to drop 10 million,’” said Manade. “They’re coming to us and they want to drop much smarter. We do a lot of analytics, we do many many many versions. That’s a huge trend. Some of the biggest mailers, some of the non-profits that mail over 50 million a year are very savvy at purchasing. The net result, the ROI, is huge. They’re not thinking about how to drive the cost of an envelope down, but how do I mail smarter.”

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